As always, check with your tax specialist prior to coming into the credit union so that you may chat comfortably with our staff associates about your needs. You can be assured that annual contributions and distributions are made in a timely, accurate fashion after you open your account.

TYPES OF IRAs

TRADITIONAL IRA: The basic IRA Account first established for an individual by the federal government for pre-tax deferral of earned income

ROTH IRA: Newer version of the basic IRA whereby post -tax income is set aside by the individual

TRADITIONAL vs. ROTH

Traditional IRA

Roth IRA

Elgibility

Age

MaximumIncome

MinimumIncome

You must be under age 70 1/2 and have earned income in order to make contributions.

No maximum income level (may be non deductible)

Earned income must be equal to or greater than your annual contributions.

No age restrictions, but you must have earned income in order to make contributions.

$107,000-$122,000 for Single$169,000-$179,000 for Married (filing jointly)

Earned income must be equal to or greater than your annual contributions.

ESA is an investment vehicle designed to help parents fund their child's education. The ESA has replaced the Education IRA. Contributions to the account are taxed, but earnings used to pay education expenses are not. Maximum annual deposit is $2,000 and the entire account has to be disbursed before the beneficiary's 30th birthday, and any withdrawals after this date or for expenses that do not qualify under the act will be subject to income taxes and a penalty.